Monday, April 18, 2011

Food manufacturers have joined mining and energy companies in demanding a guarantee the proposed carbon tax will leave them no worse off against international competitors.

The guarantee is demanded in a letter delivered to prime minister Gillard signed by 45 executives including the heads of Nestle, Yakult, Goodman Fielder and Bundaberg Sugar.

It seeks assurances the carbon tax will “not impose costs on Australia’s export and import competing industries ahead of their international competitors”.

Several executives who signed the letter including the heads of OneSteel, BlueScope and Xtrata Coal meet with the prime minister tomorrow at the industry assistance working group.

The plea comes as the Australia Institute prepares to release an analysis ridiculing claims export exposed industries will be made worse off describing the impact on their income as “likely to be trivially small” after compensation.

Prepared using data from the department of climate change the figures show the steel industry would lose 2 per cent of its income before compensation and 0.1 per cent after the kind of compensation proposed as part of the 2009 carbon pollution reduction scheme. Alumina producers stood to lose 4.6 per cent of their income (0.3 per cent after compensation) and aluminum manufactures 11.4 per cent (0.6 per cent and after compensation)...
“Firms such as BlueScope claimed in 2009 the carbon price would shut them down, but since then the Aussie dollar has appreciated 50 per cent. That has had far more impact,” said Australia Institute executive director Richard Denniss.

“A $20 per tonne carbon tax would cost BlueScope at most 0.4 per cent of its revenue, assuming it doesn’t cut its emissions. Tha’s around $34.5 million per annum. By way of comparison it says in its annual report this year’s wage increases will cost it $57.2 million.”

Food and Grocery Council chief executive Kate Carnell said her members had decided to join the push for compensation because they were already under pressure from rising costs “such as energy, wages and water, higher transport costs, record high global commodity prices and supermarkets forcing down retail prices.”

“If a carbon tax puts Australian manufacturing at a disadvantage, it will ultimately result in exporting Australian manufacturing jobs and exporting emissions,” she said.

Dr Dennis said even by the standards of the days manufacturers demanded massive protection just to stay in business the new claims were “unprecedented both in the extent of the exaggeration and the relative lack of scrutiny”.

“These firms have survived and often prospered as the dollar has soared since 2009 when they told us they were on the edge.”

The Australian Council of Social Service will today demand a flat fortnightly payment to low income earners as compensation for the carbon tax, a change from its position in 2009 when it accepted a percentage increase in benefits.

“If the carbon tax pushes up average prices $10 per week, we want a $10 per week increase in benefits for everyone in the bottom two fifths of the income distribution,” said senior policy officer Tony Westmore.

“Low income earners who are not on benefits should get a large one-off cash payment.”